China demands sensitive business data for rare earth exports, raising global concern

Beijing [China], June 13 : Western businesses claim that China is requesting private company information in order to get rare earths and magnets, which raises concerns about possible data exploitation and trade secret exposure, according to a Financial Times report.

According to some businesses and official directives, Beijing's commerce ministry is requesting production information and private client lists as part of its export certification procedure for vital minerals and magnets, the Financial Times said.

Rare earth processing and the production of the magnets that employ them are dominated by China. According to the Financial Times, Beijing has a considerable amount of influence with its trading partners because these magnets are widely used in electronics, electric vehicle motors, wind turbines, and defence applications like fighter jets.

Frank Eckard, chief executive of German magnet maker Magnosphere, said Chinese authorities were asking companies to reveal "confidential information" about their products and businesses to obtain export approvals. "It's a matter of [China] getting information officially" rather than "trying to steal it," he said, as quoted by the Financial Times.

As part of its tit-for-tat trade battle with the United States, Chinese authorities implemented more stringent export regulations on seven rare earth metals and associated magnet materials at the beginning of April. Companies all over the world hurried to get materials in order to continue production as a result of the move. According to a Financial Times report, President Donald Trump stated that Beijing would relax restrictions on the flow of rare earths as part of a framework agreement that the US and China signed this week.

Companies can also be asked to provide images of products, facilities, and details of past business relationships, according to the commerce ministry guidelines for dual-use exports. "They ask for a lot of things, really a lot of things," said Andrea Pratesi, as quoted by a Financial Times report. He said the company had submitted pictures and a video of its production line as well as information about its market, the names of its customers, and some customer orders with names blurred out.

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